ZAGG Incorporated (NASDAQ: ZAGG) is getting crushed today due to Apple Inc. (NASDAQ: AAPL) and a feature of its iPad2 that Steve Jobs himself debuted today. ZAGG makes the invisibleSHIELD and makes skins for consumer electronics. It also makes the ZAGGmate and a tilt-device with a keyboard for the iPad.
If you want to know why ZAGG is getting Zigged or Zagged so hard today, just take a look at the iPad2’s Smart Cover feature. Apple notes on its site, “The Smart Cover and iPad 2 were made for each other. Literally. Built-in magnets draw the Smart Cover to iPad for a perfect fit that not only protects, but also wakes up, stands up, and brightens up your iPad. That’s not just smart. It’s genius.”
Apple’s iPad2 debut even noted, “So why hide it in a bulky case? The slim yet sturdy Smart Cover protects your iPad screen without covering up its durable aluminum back.1 So your iPad still looks and feels like an iPad — just with a little extra protection. Even better, the Smart Cover doubles as the perfect movie-watching, game-playing, web-surfing, do-it-all companion. It folds in all the right places so you can quickly create a stand that holds iPad upright. Or one that lets you tilt iPad into a comfortable typing position. If you prefer to hold iPad, the Smart Cover flips back and out of the way like a page in a magazine. And if you want to shoot some HD video on the fly, the Smart Cover folds in half to expose the back-facing camera. Now that’s something to smile about.”
This might not kill ZAGG’s business entirely but it sure looks like a big portion of the “easy dollar spend” is going to be challenged at best. the company is due to present at Northland Capital Markets Growth Conference tomorrow on Thursday, March 3rd at the Roosevelt Hotel in New York City.
ZAGG Inc. also noted earlier that it is in a quiet period until fourth quarter results are announced and that management intends to only discuss financial results and business operations that have already been released. Will today’s development change that? It would seem at least likely. The effect here may be a more limited scope of the sales of some of ZAGG’s products, but that is not likely an entire hit as ZAGG has other products for consumer electronics buyers who love their “personalized stuff.”
Apple may have yet another new hit upon a hit. Unfortunately, that may hit ZAGG Inc. as shares are down 20% at $7.47 on the day after a 52-week trading range of $1.90 to $10.56.
JON C. OGG
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